Estate and Trust Planning

If you own property, you should be looking into estate and/or trust planning. You want to ensure that when you can no longer manage your finances on your own there is a mechanism in place to take care of your assets.

Let’s firm up those plans for where your estate and finances end up with this guide to estate and trust planning.

What Is Estate Planning?

Estate planning is the process of creating legally binding paperwork that outlines how you want your assets to be distributed after your death or at a point where you become incapacitated. This can be a hard subject to discuss with your accountant or family lawyer, but it’s essential to protect your assets from cash in the bank to your cars and home.

You’re creating a blueprint of how your assets get distributed to your beneficiaries. Through this process, you also identify ways to lower the tax burden of transferring these assets.

What Is Involved With Estate Planning?

You might think that you already have a will, so what’s the big deal. Estate planning involves more than passing your home and money to your kids. It includes:

  • Instructions for your financial affairs if you become injured or no longer able to care for yourself.
  • Protect beneficiaries who might be irresponsible with the assets.
  • Arrange for care and custody of minor children.
  • Identify ways to lower taxes and court costs.
  • Help a disabled family member without risking their federal benefits.

Planning your estate is essential work and requires professional help.

Benefits of Estate Planning

Here are a few of the benefits of estate planning to help you see its importance:

  • Lowers tax burdens.
  • Provides peace of mind for you and your family.
  • Ensures minor children are taken care of by the person of your choosing.
  • Provides for your finances if you’re incapacitated in some way.
  • Protects your finances and assets for your family.
  • Names the trustee of your estate who handles them according to your wishes.

You want to know that your family and loved ones are cared for if something happens to you. Estate planning ensures that they are.

When Should You Start With Estate Planning?

Now, you should start estate planning now. It’s easy to say that you’re young, and you’ll be around for many decades.

This is probably true; however, time passes more quickly the older you become, and no one is promised a set amount of time. You can always make updates to your estate planning as your situation changes, but having it in place now ensures the care of your family if the unexpected happens.

How to Get Started With Estate Planning?

Part of your hesitation to start estate planning is wondering how do you get started. You start with the trusted advisor that you already have in place. Your certified public accountant (CPA) and family lawyer can help you begin. You’ll list your assets, determine your beneficiaries, plan for your future, and taking care of your family when you can’t. These professionals know the steps to take and the nuances of getting everything done the right way.

What Is Trust Planning?

Trust planning is the process of assigning a third party to manage your assets after your death to minimize the tax repercussions. This type of planning can also help you establish a way to give money not only to your living family but your future descendants as well. By creating a trust, you help your family avoid the necessity to go to court to probate your will before benefiting from your assets.

What Is Involved With Trust Planning?

The biggest step in trust planning is deciding the type of trust you want to establish. It can be irrevocable or revocable, which means you can choose to create one that you can end or one that you can’t.

There’s the option to create a marital trust for a surviving spouse or a bypass trust that creates a tax shelter for your assets. You can also set up a charitable trust. Talk to your CPA to learn your options and advice on establishing the right trust for your needs and goals.

Benefits of Trust Planning

Before you start calling your accountant and lawyer, you want to be aware of the benefits of trust planning. Here are a few to consider:

  • Your family avoids the hassle of probate and the associated court costs.
  • You can determine how your assets are used and distributed.
  • You may find tax benefits to keep more of your finances in your family.

There are many other benefits that you can enjoy from building your trust. Your CPA and lawyer can help you explore the benefits that are most important to you.

When Should You Start With Trust Planning?

For many, the subject of death is uncomfortable, but it’s also a fact of life. You need to start trust planning as soon as you finish this article.

It provides you with the peace of mind you need to know that your family will be okay should something happen to you. As the years pass, and your assets change and increase, you can add items to your trust.

How to Get Started With Trust Planning?

The first step to getting started with trust planning is to contact the professionals that you’re already working with on your finances. This includes your CPA and family lawyer. When you go to the meetings, take a list of the assets you want to be protected and the personal information of your proposed beneficiaries.

At McNurlin Hitchcock, our team of CPAs understand the ins and outs of estate and trust planning. We’re ready to advise you on your options and help you set your ideas into motion. We will answer all of your questions and explore your options with you. When you’re ready to take the next step, contact our office to schedule an appointment.